Indonesia Car Rental Market - Forecasts from 2025 to 2030

The Indonesian car rental market is projected to grow at a 7.31% CAGR over the forecast period, increasing from US$2.68 billion in 2022 to US$4.72 billion by 2030.

A car rental service, also known as a car-for-hire service, is a type of service that offers cars, with or without drivers/chauffeurs, to customers. The average time or contract period of this type of service may range from 1 day to a few months. In the car rental market, various new contract types, like subscription models, have been introduced, which offer customers the availability of a car for some fixed months.

Indonesia Car Rental Market Trends:

The car rental services in Indonesia usually include a driver, making it convenient and stress-free to visit the diverse landscapes and bustling cities of the country. This service is highly in demand by tourists and business travelers as it avoids the hassle of driving on unfamiliar roads, dealing with local traffic, and communicating in the local language. The driver will usually know the routes of local roads, tourist destinations, and cultural habits, hence additional information or safety in this sense. The service is widely accessible in cities like Jakarta, Bali, and Surabaya. Its packages vary to meet travelers' demands, including short trips up to a full day or even multi-day rentals.

The nation’s growing population is also estimated to boost the rental car market in Indonesia, as this service offers an efficient and cheaper option for cars, without having to own a car. The car rental services also allow consumers to travel longer distances at a minimum cost. The nation’s population has witnessed a constant rise and is among the most populated nations in the Asia Pacific region. The World Bank, in its report, stated that in 2021, the total population of Indonesia was 273 million, which increased to about 275 million in 2022, finally reaching 277 million in 2023.

Indonesia Car Rental Market Growth Drivers:

Increasing Tourism in the country

One of the major factors driving the Indonesian car rental market forward can be estimated to be the increasing tourism sector in the region. Indonesia is among the most visited international destinations in the Asian Pacific region. International tourists visiting the nation generally prefer to travel independently, increasing the demand for the self-driven rental car market forward.

The number of international tourists has witnessed a major increase in the last few years. The BPS-Statistics Indonesia, previously known as the Central Bureau of Statistics of Indonesia, stated that the nation witnessed a significant increase in its international and domestic tourism. The agency further stated that in April 2023, about 865.81 thousand international visitors arrived in the nation, which increased to 953.71 thousand in May and 1,062.79 thousand in June 2023, respectively. In July 2023, the total number of international visitors arriving in the nation reached about 1,121.19 thousand, marking a significant increase in the tourism industry.

Indonesia Car Rental Market Segment Analysis:

The self-driven segment is anticipated to hold a significant share in the market in the projected period.

Even though Indonesia is known for being the second-largest manufacturer of automobiles in Southeast Asia, it still has a smaller number of people with vehicle ownership. This is apparently due to the expensive cost of car ownership, which incorporates parking costs as well as vehicle maintenance costs, leading to people shifting their preference to self-driven car rentals. According to the Indonesian Ministry of Industry data, car ownership in the country was very low, with approximately 99 in every 1000 individuals owning a car. Thus, it allows more people in the country to opt for self-driven car rentals for commuting, traveling, and exploration purposes.

Moreover, tourism is an expanding sector in Indonesia and is a key contributor to the growth of the country's economy. This blooming tourism sector, due to both domestic and international tourists attracted to popular locations such as Bali and Jakarta, will also positively surge the demand for self-driven car rentals. According to the report of July 2024 from the Bali Central Bureau of Statistics, Bali reported 2,391,860 foreign tourists in the first five months of 2024, which was an increase of 27.46% from 2023, while it also witnessed 4,091,049 domestic tourists from January to May of 2024. Moreover, the largest international tourist market share as of May 2024 was from Australia, which was 23.74%, while India and Singapore notably showed a growth rate of 50.23% and 51.19 %, respectively, in May 2024. In addition, many tourists prefer to explore the country independently, and the availability of navigation apps like Google Maps and Waze is making it easier for tourists to travel on their own, leading to a rise in the self-driven car rental segment in the coming years.

Indonesia Car Rental Market Geographical Outlook:

By Cities, Jakarta is expected to hold a substantial share in the market in the coming years.

Jakarta is one of the largest cities in Indonesia, which has witnessed a positive urban development over the years. Further, the rising disposable income, coupled with the strengthening of infrastructure facilities like internet connectivity, provides a good business opportunity for online car rental service providers.

As per the estimates from BPS-Statistics Indonesia, in 2023 (quarter 3), Jakarta witnessed around 16,979.70 thousand tourists, followed by other provinces such as Sumatera Utara, DI Yogyakarta, Bali, and Nusa Tenggara Barat, among others. Therefore, this highlights lucrative prospects for the expansion of the car rental market in the country as travelers from other countries look for convenient and reliable means of transportation during their stays. Likewise, the same source suggested that the ROR (room occupancy rate) of classified hotels in Jakarta stood at 52.69%, which is much higher than several other cities in Indonesia overall.

Furthermore, the increasing business travel across the country supports the growth of on-demand mobility services. The flexible transportation option offered by car rentals meets most of the needs of people traveling for both business and leisure. Additionally, the presence of leading players in the city will lead to more innovations in car rental services. For instance, Avis provides a broad portfolio of car rental options in Jakarta under different car rental types, such as for airport-related needs.

The Indonesian Car Rental Market is segmented and analyzed as below:

By Car Type

Electric
Gasoline
Economy
Luxury
SUV
MUV

By Service

Self-Driven
Chauffeur Driven

By Application

Leisure/ Activity Trips
Corporate/ Business Trips

By Booking

Online
Offline

By Rental Category

Local Transport
Airport Transport
Outstation Transport
Others

By Contract Type

Long-Term
Short- Term

By Cities

Jakarta
Surabaya
Bali
Yogyakarta
Others